Richard Teerlink has been responsible for the revitalization of this American icon that was on the verge of closing its doors in 1985. By investing in product quality, customer satisfaction and human capital, Teerlink managed to return Harley to the position it occupies today.
This article is based on the lecture given by Richard Teerlink at Expomanagement on May 21, 2004 (and that like my previous post, I have recovered from my archive of articles written for News.com and that I thought were lost forever) 
To those of us lucky enough to be able to attend the event, he explained how he had managed to increase Harley's market share from 13% (in 1985) to the current 49% and what changes he had made to the organization of which he was then Financial Director.
The difficult moment of recognizing one's own mistakes
For Richard Teerlink, the most difficult part of Harley's conversion was convincing management that the conversion was necessary.
"For change to occur, the first to change must be the managers."
In the early 1980s, within a matter of a few months, the United States was invaded by Japanese motorcycles sold at prices far below those of Harley. Harley managers and employees thought that the Harley brand could never lose market share (almost 60%), they thought that Japanese motorcycles could not be robust or of good quality (either in terms of price or appearance) and that Americans would not buy Japanese motorcycles. All three assumptions turned out to be false. By 1985 their market share had shrunk to 13% and Harley Davidson was close to bankruptcy.
For Harley's executives, there were several options: throw in the towel and close down, invest in marketing and try a traditional solution, or reinvent the entire organization, risking failure or achieving the greatest success. All three were considered, and some chose the first, while the company as a whole finally opted for the third.
Richard Teerlink insisted that resistance to change is inevitable, but can be reduced by providing clarity about what is expected and what will change. People usually do not resist change itself, but rather being changed themselves.
How to move from survival to renewal
For Teerlink, the secret is that the entire company must begin to work for a common cause. A good leader is one who gets his people to work towards common goals because they want to, not because they have to.
This is achieved by creating an environment that promotes 5 factors:
- Stay up to date with what's happening in the world.
- Responsibility for every individual in the company.
- Training and lifelong learning.
- Personal involvement in projects.
- Mutual appreciation among the entire team.
In Harley's case, the common cause they decided to fight for was to turn a company that sold motorcycles into a business that sells reasons to ride motorcycles and live "American Nostalgia." And it has worked.
What is the role of a leader in the reinvention of a company?
Teerlink says that a good leader should ask himself or herself daily: Am I putting resources in place so that the people who work with me can do their jobs? Am I confident that my employees can grow and develop as people?
Why workers are a company's greatest competitive advantage
In a company, it is important to differentiate your products and processes with characteristics that distinguish them from those of the competition. But the main difference between Logo Harley and one company or another is the commitment of the employees themselves. When employees fully identify with the company, great value is generated for customers and they perceive this and also become part of “the cause” for which they work.
Strategies to create a powerful brand
For Steelink there are 3 key factors when it comes to maximizing the value perceived by people about a brand:
- The reputation for quality and trust in the brand.
- The reputation that the company makes money.
- Having a large market share.
To get these 3 points, 3 requirements are necessary:
- Know your business well (know exactly what you do).
- Know your client well.
- Pay attention to detail.
Teerlink quote on this: “What we sell is the ability of a 43-year-old accountant to dress in black leather, drive through small towns and get teenagers to be afraid of him..”
How to attract new customers while retaining existing ones
Once again, Teerlink and Tom Peters agreed on this point. For both of them, the secret is to forget about the product (we assume that the product is good) and focus on connecting emotionally with the customer.
Quote from Steerlink: “Give the customer a reason to ride a motorcycle and have fun”.
Obviously the goal is to sell motorcycles, but all marketing efforts are focused on communicating the things they can do and feel while riding or traveling from one place to another on their Harley motorcycles.
How to Increase Your Profits in a Super-Competitive Environment
At the risk of repeating myself, Teerlink said the same thing as Tom Peters: «Change is necessary to adapt to the hyperluminal speed at which our environment moves..
There is no other option than to surround yourself with people who think for themselves, who are responsible for their actions and who constantly adapt. That is why it is important for all employees of a company to know what its mission is. Otherwise, changes would have different objectives in different areas of the company.
Quote from Teerlink: “There are two immutable truths in life: one is that we are going to die someday, the other is that change is inevitable..”
But Teerlink makes it clear that change for the sake of change is not a good thing either – change has to be done for a reason. But typically, most changes made in a company are to correct previous mistakes in management or judgment.
To finish… a couple of anecdotes I would like to comment on:
One is a Harley ad aimed at conveying the quality and robustness of its bikes, while reinforcing the message of "American Nostalgia": The ad shows 3 big American guys, size XXL, with their beards and long hair, dressed in leather and studs, and with their Harleys parked in front. A text reads: "Would you sell these guys a faulty, oil-leaking bike? We wouldn't either. Harley-Davidson, the motorcycles…» (…. I don’t remember the rest…). I thought it was great!!!
The other was a comment from Teerlink himself about "the pressure of working in a company where clients tattoo the brand on their chests and forearms“…it must really be quite an experience… Have you ever felt something like that about a brand?
